Dick’s Sporting Goods crushes estimates as online sales surge 194%
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Dick’s Sporting Goods said second-quarter online sales jumped a whopping 194%.
Net sales increased 20.1% to $2.71 billion from $2.26 billion a year earlier, beating expectations for $2.46 billion.
Chief Executive Ed Stack said the company benefited from more people getting outside and working out during the coronavirus pandemic.
Dick’s Sporting Goods reported eye-popping quarterly earnings and sales growth Wednesday, saying consumers flocked to its website for hiking gear, kayaks, weights and workout clothes to stay busy during the coronavirus crisis.
Its shares were up about 12% in premarket trading.
The retailer’s digital sales surged 194%, including the orders customers made online to pick up at stores when they were shuttered. And profits increased by a triple-digit percentage from a year earlier, thanks in part to the retailer not having to use as many promotions to move merchandise that was in demand.
“During this pandemic, the importance of health and fitness has accelerated and participation in socially distant, outdoor activities has increased,” Chief Executive Ed Stack said in a statement. “There has also been a greater shift toward athletic and active lifestyle product with people spending more time working and exercising at home.”
“The majority of our assortment sits squarely at the center of these trends,” he added. “We are in a great lane right now.”
Here’s how Dick’s Sporting Goods did during its fiscal second quarter ended Aug. 1, compared with what analysts were expecting, based on Refinitiv data:
Earnings per share: $3.21, adjusted, vs. $1.30 expected
Revenue: $2.71 billion vs. $2.46 billion expected
Net income for the quarter ended Aug. 1 grew roughly 148% to $276.8 million, or $3.12 per share, compared with $112.5 million, or $1.26 a share, a year earlier.
Excluding one-time charges, Dick’s earned $3.21 per share, more than double the $1.30 that analysts were projecting.
Net sales increased 20.1% to $2.71 billion from $2.26 billion a year ago, beating expectations for $2.46 billion.
Same-store sales, which track sales at stores open for at least 12 months, were up 20.7%. That was better than the 9.9% expected by analysts polled by FactSet, and up drastically from growth of 3.2% in the same period last year.
An employee of Dick’s Sporting Goods in Destiny USA mall delivers products to a shopper, as customers pick up goods from retailers offering curbside pick up as the coronavirus disease (COVID-19) restrictions ease in Syracuse, New York, U.S., May 15, 2020.
Dick’s said its online sales, which skyrocketed nearly 200%, represented roughly 30% of total revenue during the quarter, compared with about 12% a year ago.
President Lauren Hobart said the growth was supported by the fact that the average ticket and transactions were up, while sales in apparel and footwear — two of its strongest categories — grew substantially.
The big-box retailer joins Walmart, Target and Best Buy in reporting remarkable results in recent days, while many mall-based companies are limping through the Covid-19 crisis. The strongest retailers appear to only be getting stronger, with the gap widening between the haves and have-nots.
Dick’s said it is not offering an outlook for the rest of this year due to the pandemic. It did say it has seen some “softness” across key back-to-school categories in the current quarter, as many parents are still unsure what this school year is going to look like during a global pandemic.
So far, during the first three weeks of its fiscal third quarter, Dick’s Sporting Goods said same-store sales are trending up 11%.
The retailer ended the second quarter with $1.1 billion in cash and cash equivalents on its balance sheet.
Its inventories dropped 12.2% compared with a year earlier.
Dick’s Sporting Goods shares have fallen roughly 6% this year. The stock is up about 44% over the past 12 months, giving the company a market value of $4.2 billion.
